The Truth About Deducting Business Travel: What Really Counts

Business travel can be a valuable tax deduction, but only if you play by the rules. Many entrepreneurs assume that forming an LLC gives them a green light to write off flights, hotels, and meals. But the IRS takes a much closer look. Here’s what you really need to know if you want your business travel expenses to be deductible.

1. You Must Have a Real Business

First things first: simply having an LLC isn't enough. You need to be running an actual business with a profit motive. That means selling goods or services, marketing your offerings, keeping financial records, and operating in a way that shows you’re trying to make money. If your business is just an occasional side hustle or hobby, your deductions are on shaky ground.

2. The Trip Must Be Primarily for Business

How your time is spent matters more than anything else. To qualify as a business trip, the primary purpose must be business-related. In the eyes of the IRS, that means more than 50% of your trip, based on time spent must involve business activities. Attending a conference, meeting clients, or scouting a new location are all valid reasons. A morning meeting followed by four days at the beach? Not so much.

3. Documentation Must Be Airtight

The IRS loves documentation, and when it comes to travel deductions, they expect precision. You need to keep a detailed log of:

• When the trip occurred

• Where you went

• Why the trip was necessary

• Who you met or worked with

  
  

Receipts alone aren’t enough; you need a clear paper trail showing that the travel had a legitimate business purpose. A shared Google calendar, travel itinerary, and meeting notes can go a long way in backing up your claim.

4. Bringing Family? Be Careful

Want to bring your spouse or kids along for the ride? You can, but their expenses are only deductible if they’re W-2 employees of the business and they’re doing real work. That means actual duties, not just tagging along. Otherwise, their travel costs (airfare, meals, hotel) are considered personal expenses and not deductible.

5. International Trips Face Stricter Scrutiny

Thinking about mixing business with international travel? The IRS holds these trips to a higher standard. For international travel to be deductible, at least 75% of the trip must be for business purposes. You’ll also need more detailed documentation to prove the necessity of traveling abroad for work instead of handling things domestically. If business is just a small part of your international trip, you can only deduct the portion directly related to business activity.

Final thoughts

Deducting business travel can be a great way to reduce your tax bill, but only if you follow the rules. Before booking that flight or writing off the hotel, make sure your business is legit, your purpose is clear, and your records are bulletproof. When in doubt, consult with us to avoid costly mistakes.